Tentative refinery deal bodes well for drivers
It appears a widespread oil refinery strike, the first labor dispute of its kind in decades to affect oil production across the nation, may be winding down.
On Thursday, the United Steel Steelworkers union (USW), which represents workers at 65 refineries that are responsible for about two-thirds of all oil production in the U.S., said it had reached a tentative agreement with Shell Oil (RDS.A), which has been representing the oil companies involved in the dispute.
If approved, that agreement would pave the way for a resolution of the six-week-long strike that has affected 15 oil facilities in California, Kentucky and Texas -- including seven refineries that account for 10 percent of U.S. refining capacity.
While wages and health care programs, as well as plant repair and maintenance, were at issue, the USW stresses that safety concerns were "were central to the negotiations, and the proposed agreement calls for the immediate review of staffing and workload assessments, with USW safety personnel involved at every facility."
Gas prices have been on the rise in recent weeks, following the historic tumble that began in mid-2014 due in part to the North American oil boom. But analysts say the refinery strike was only one element causing prices at the pump to creep upward.
"In most places the strike had little impact on gasoline production, but there was real fear in the market that it would spread in a way that would lead to higher gas prices," Michael Green, AAA spokesman, told CBS MoneyWatch. "There was always the possibility that the strike would disrupt refinery operations and burden drivers with higher prices at the pumps."
This is also the time of year when refineries usually go off-line for scheduled maintenance, which limits gasoline production and affects oil and gas pricing.
But Green pointed out that crude oil costs have dropped quickly this past week, and there's hope that gas prices will fall again. Drivers in California, where gas prices have risen the most recently, would likely see the greatest benefits.
"A strong agreement to end the refinery strike is more good news for everyone hoping that gas prices remain cheap this year," he added. "(It) will remove a large threat hanging over the heads of drivers this spring. Refineries can now focus on making gasoline as we enter the busy summer driving period."